The latest consumer price index (CPI) data for the month of October, scheduled to be released by the U.S. Bureau of Labor Statistics on Tuesday, is expected to show further signs of slowing inflation. Economists surveyed by Dow Jones are expecting that the CPI increased by 0.2% during the month, which would be lower than the 0.3% increase seen in September. Core CPI, which excludes volatile goods such as food and energy, is forecast to show a 0.2% increase in October, unchanged from the previous month.
While many economists are expecting further signs of slowing inflation in the latest CPI report, some expect that the data may show a slight uptick. This is due to the rise in gasoline prices in October that reportedly offset any declines in other components of the index.
Despite the pickup in gas prices, inflationary pressures remain relatively muted. This is because of the slow economic growth and weak job market, which have caused consumer spending to stagnate. As a result, businesses have been cutting prices in order to attract customers.
The Federal Reserve is closely monitoring inflation data, as the central bank decides when to begin reducing its asset purchases. The Fed will likely take an extended pause in order to gauge the effects of its current policies before making any further moves. This means that the decline in inflation is unlikely to be viewed as a major concern for the central bank, as long as prices remain well below the Fed’s 2% target rate.